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Reliance Capital to sell up to 20pc stake in mutual fund arm

Anil Ambani Group's financial services firm Reliance Capital is considering divesting up to 20 per cent stake in its mutual fund arm, Reliance Asset Management Company, to an overseas strategic partner.

Induction of global partner would help Reliance Asset Management Company to expand its reach and help improve product, technology and process, sources told.

Reliance Capital holds 93.37 per cent in Reliance Asset Management Company, the largest mutual fund house with asset under management over 1.18 lakh crore.

When contacted, Reliance Capital spokesperson said, “As a policy, we do not comment on speculations.”

In 2007, Reliance Capital sold 5 per cent stake to global investor Eton Park for Rs 501 crore, at an equity valuation of Rs 10,000 crore. Eton Park Capital Management is a hedge fund founded by former Goldman Sachs partner Eric Mindich.

The investment valued the asset management firm at about 13 per cent of its assets under management and the valuation translated into a price of Rs 400 per share of Reliance Capital.

The development assume significance in the light of UTI Asset Management Company entering into an agreement with the US-based T Rowe Price for selling 26 per cent stake to the foreign institutional investor.

Source: Economic Times

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